The fall in the international price of oil put at risk the operational continuity of many oil companies in Bolivia, to which the State owes more than $19 million for commitments made in the last two years, within the framework of the Law for the Promotion of Investment in the Exploration and Exploitation of Hydrocarbons. According to data from YPFB, gas production in 2025 will fall by more than 26% compared to 2019. If Bolivia does not do anything in exploration, in the next four or five years, it will import 100% of liquid fuels, and in seven or eight years it will have no gas to export.
In 2019, the Bolivian state lost more than $50 million in gold mining revenues, despite increased sales of the gold and rising prices. Bolivia recorded 42 tons extracted with a value of nearly $2 billion, (the highest export of all minerals). It is because gold miners only pay a 2.5% share that applies to marginal deposits and not the corresponding 7%.
The National Chamber of Commerce (CNC) warned that some 100,000 jobs in Bolivia are at risk and that 20% of companies could close operations due to the illiquidity generated by the Covid-19 quarantine. The quarantine left at least $300 million of losses in the sector.
Due to the quarantine, the implementation of teleworking and tele-education, internet consumption in Bolivia rose by 40%. In the country, the telephone companies currently have more than 10 million users, of which between 80% and 85% are postpaid customers and the rest are prepaid customers (mainly cell phones). These users have increased internet consumption by 40%, reported the president of the Bolivian Telecommunications Chamber (Catelbo), Eduardo Trigo.
Brazil’s requirements rose to 14 million cubic metres of gas, a situation which, from the perspective of the hydrocarbons minister, augurs well for Bolivia’s revenue recovery. The arrival of winter would also determine an increase in gas demand from Argentina. According to reports from the Bolivian Institute of Foreign Trade (IBCE), in the first quarter, natural gas exports represented 33% of total exports, for an amount of $664 million.
Due to the quarantine, the implementation of teleworking and Tele-education, internet consumption in Bolivia increased by 40%, but new users do not even reach 10%. The telephone companies have more than 10 million users, between 80% and 85% are post-paid customers, and the rest opt for prepaid, especially in consumption by cell phone. Because of the quarantine, several post-paid users have been owing bills since January, so the companies are suffering from severe illiquidity, which forced the operators to suspend their investments to improve the service.
Two months after the quarantine, 40% of the 115 formal farms operating in Santa Cruz decided to close due to the sharp drop in demand for pork, which also caused the price of the live kilo to fall to Bs 10.5. Forty-five thousand pigs remained in the production centres of Santa Cruz, a region that supplies 80% of the animal protein in the whole country.
Despite the signing of an interruptible contract between YPFB and Petrobras for the month of May, the volume of exports remains below 14 million cubic meters per day (MMm3d) contemplated in the 8th addendum. Compared to the 21 MMm3d projected in the State’s General Budget (PGE), sales are equivalent to only 50%.
Two months after the quarantine, only three out of 10 cargo trucks are operating in Bolivia. The International Transport Association (Asociaatrin) points out that due to the quarantine there is a lower volume of transport in key sectors such as soy derivatives, mining, and construction. Marcelo Cruz, president of Asociatrin, indicated that in the oilseed sector the volume of cargo contracted by 50%.
The paralysis of the economy, the slow reactivation and the lack of closing of the financial statements of the companies, force the business sector to request a deferment of the payment of the Profit Tax, which is fulfilled this May 29, until October or at least to delay 60 days. The National Chamber of Commerce (CNC-Bolivia) and the National Chamber of Industries (CNI), in a joint statement, said that due to the paralysis of most economic activities during the quarantine, companies have been unable to generate sufficient income to meet their obligations.